How to make your holiday money go further this summer: The best ways to make purchases and exchange your money

With the arrival of the school holidays, families across the UK are heading abroad in their droves, but this year their wallets could be feeling a lot lighter.

Travellers purchasing dollars or euros ahead of their trips are getting a lot less for their pounds than they were this time last year thanks to sterling's fall in value following the Brexit vote last month.

A holidaymaker buying £200 worth of euros now will receive around €238 at today's exchange rate, which is almost €50 less than they would have got a year ago, according to analysis by personal finance website Moneyfacts.co.uk. It's a similar story for dollars, with £200 now buying around $262 - also around $48 less than the same time last year.

Dwindling dollars: British holidaymakers will be getting around $50 less for changing £200 this summer

But it's not just disappointing exchange rates that are leaving holidaymakers feeling short changed. Charges for using your bank or credit card abroad can often be hefty.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: 'Cash isn’t always king due to the danger running out of money in emergencies, or losing it. Debit or credit cards and even prepaid cards can make it simpler for people to track their spending, and they can be more secure than carrying around bundles of cash. The only downside is using cards that charge for each use, and one of the most expensive transactions is withdrawing cash from an ATM.'

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HOW THIS IS MONEY CAN HELP

Moneyfacts found that some debit cards charge as much as £9.50 for a £200 ATM cash withdrawal, such as that which comes with the NatWest Select Account it charges a transaction fee of 2 per cent and a conversion fee of 2.75 per cent on cash withdrawals.

Meanwhile, the HSBC Credit Card Visa charges almost £12 for the same ATM transaction thanks to the 2.99 per cent usage fee and 2.99 per cent cash withdrawal fee it levies on customers abroad.

Instead of these costly cards, Moneyfacts found the best debit card for overseas use to be the one that accompanies Norwich & Peterborough Building Society's Gold Account as it's free to use abroad. The perk is applicable if you deposit at least £500 per month into the account or have an average balance of at least £5,000 - otherwise a £5 monthly account charge will apply.

Wherever you're off this summer, make your pounds go further by getting the best rates and lowest fees

As for the best credit card for overseas use, Moneyfacts highlighted the MBNA Everyday Plus American Express Credit Card, which is a low-rate card that charges no fees on non-sterling transactions or cash withdrawals (7.4 per cent APR on purchases, balance transfers and money transfers).

You could also get more bang for your holiday buck by using a prepaid currency card - many of which offer very competitive exchange rates or charge no commission, meaning you have more money to enjoy your holiday.

Moneyfacts' top pick is the My Travel Cash Euro Currency Card. The minimum top up for the MasterCard is £30 and it charges no ATM fees in Europe. It also pays 1 per cent unlimited cashback on purchases.

FairFX customers will also get a refund on all ATM fees this summer until 31 August for using any of the provider's prepaid currency cards, including the Euro Card, US Dollar Card and Everywhere Card. The MasterCards usually charge €1.50 for euro ATM transactions and $2 for dollar withdrawals but don't charge fees in shops and restaurants - unlike many debit and credit cards.

OTHER WAYS TO GET MORE FOR YOUR POUNDS

There are lots of ways to make sure you get the very best exchange rates, and/or lowest fees, possible when you need to buy foreign currency. For example, you can view the best high street foreign exchange rates at FairFX.com. You could also look out for 'rate sales', such as Asda Money's taking place between 8am on Wednesday 20 to Friday 22 July.

Travel money provider FairFX has the following tips for getting a good deal on your holiday money:

1. Order in plenty of time before you travel

2. Sign up to email rate alerts (if available) and be the first to know when rates hit a new high

3. Don’t exchange money at the airport as they often provide the worst rates